Quarterly Decisions-- Marketing

Price

Limits, Merican areas:  1 to 99.99 (in dollars and cents)

Limits, Foreign area:  1 to 99999 (in local currency)

Maximum change, Merican areas:  30 percent in any quarter.

Maximum change, Foreign area:  40 percent in any quarter.

Exception:  If the sales office is closed (see below) the price is 0

Advertising

Limits, Merican areas:  0 to 999 (in thousands of dollars)

Limits, Foreign areas:  0 to 9999999 (in thousands of local currency)

Sales People

Hiring - Limits:  0 to 999

Discharge – Limits:  -99 to 0

Maximum:  Number of active salespeople

Transferring among areas – negative numbers transfer out, positive numbers transfer in.

Maximum transferred out:  number of active salespeople in area

Maximum transferred in:  total transferred out from other areas

The sum of positive numbers may not exceed the sum of negative numbers

Limits:  -99 to 99

Note:  Make sure you leave at least one sales person in each area unless you want to close a sales office.  The sales office in an area will be closed if there are no sales people.

Sales Force Compensation

Salary - Limits, Merican areas:  1 to 9999 (in dollars)

             Limits, Foreign area:  1 to 9999999 (in local currency)

Commission - Limits, Merican areas:  1 to 999 (cents per unit)

                      Limits, Foreign area:  1 to 99999 (deni, sen or centavos)

Models

Identified by number unique to each company.

Limits:  1 to 12

Maximum:  Highest model number reported to be available from the R & D Dept.

Minimum:  Same model number as was produced last quarter.  Once a new model has been placed in production, an earlier model may not be reintroduced.

Model design changed only when new model is produced

A new model put into production will not be introduced to the market until the following quarter.  It will not show up on the Quarterly Industry Report until the following quarter.  The new model will be sold only if the supply of the old model is exhausted.  Units of the old model not sold during the quarter will be sold to a liquidator at the end of the quarter.

Sales Office Orders

Orders must be placed for products to be shipped.  Products may be sold the same quarter they are received.  As products are custom designed for each market area, shipments can be made only from new production.  Products produced but not shipped to another market area are created to the specifications of the area in which they are produced.

Limits:  0 to 999 (in thousands of units)

Your firm has adopted the following distribution policies:

1.Goods held in inventory will not be shipped to another area.

2.Sales office orders in a producing area hold goods for the local sales office.

3.Production beyond the local sales office orders will be used to fill sales office orders in other areas.

4.If production is less than the local sales office orders, a request for shipment from another plant (if there is one) will be issued.

5.If production is less than total sales office orders, shipments will be pro-rated according to the size of the orders.

6.If production capacity is available to fill orders from more than one plant, orders are filled first from non-home area plants in this order: fourth area and then the two domestic non-home areas (the order is Merica 1, Merica 2, Merica 3) and finally the home area.

Closing and Opening a Sales Office

Close sales office:  Transfer or discharge all sales people in the area.

Set price, sales commissions, advertising, sales office orders, and sales salary to zero for the area.

Open sales office:  Transfer at least one sales person into the area.  Sales can begin the   following quarter.